The Trials And Tribulations Of Starting A Manufacturers’ Agency From Scratch

In early 1991, after years of cocktail discussions about starting our own business, my partner and I decided the time had come to begin the process. There were several driving factors that led us to the desire for our own business — a desire to be stationary and stop the cycle of relocations around the country every couple of years, a belief that we had the skills necessary to be successful, an inclination to test our beliefs that we could do things better than the management at companies where we’d worked, and a desire to steer our own destiny.

We also believed that because of downturns in the industry we were in and the company CEO’s plan to move the company to another state, our division would be moved in total in the relatively near future, leading to another relocation or a layoff for both of us. There was also a new president from outside the industry, and we both had philosophical differences with him about how to run the company. We didn’t agree with his desire to change the business into a division that only handled the very largest capital projects. We both felt that the strength of the division through the years had been the diversity of the product mix, and that to make the above change would require basically all new personnel with different skills. We felt this was impractical in a depressed market, and would only lead to the demise of the division.

The First Year: Inventory

We inventoried our individual personal skills and developed a list of the things we felt were our strengths or that were areas of special technical expertise, including:

Some technical expertise in turbines, material handling, and nuclear services

Business planning

Contract administration

Project management

Knowledge of refining, utilities, and primary metals industries

Construction management

The first year was spent in name searches, developing bylaws, buying office equipment, incorporating the business as a subchapter S corporation, and obtaining a general engineering contractor’s license for the state of California. We continued to work for others during this process.

At the end of the first year the preliminary work was completed, and we had our own corporation. We didn’t have a product to sell or install, but the business existed and was starting to cost money each year.